Zefty Helps You Teach Kids About Money

Zefty is a new service designed to help parents and children learn about how to save and appropriately spend allowance money. Create an account for yourself and your child, and teach them how to manage their money using a virtual bank account where you control the cash.

A number of people, especially teenagers and college-age young adults, explain when getting into trouble with credit and debt that they never really understood the responsibility they were signing up for. Many people believe that parents and schools should start teaching children about money early, and do more than just offer an allowance for chores to teach the "value of a dollar." Zefty, a new service designed to help parents and children learn about how to save and appropriately spend allowance money, can help.

Teaching a child how to save and manage their money starts early, much earlier than after that child has gone to college and loaded up a half-dozen credit cards with debt that's growing at 23% APR. Unfortunately, most schools don't teach children anything about money management, so the task is left to parents. Zefty is a Web service that can help you teach that lesson, and train your child to know how to use the Web to manage their money.

When you sign up for an account, you create a virtual bank for your child. Your child has their own login and password for Zefty, and after logging in they can see their account balance just like any other online bank. When your child needs money, they come to you for it. That way you're still your child's "bank." You give them the money they need, and then make the deduction from the child's Zefty account. The next time your child logs into his or her Zefty account, they'll watch the money disappear as they spend it.

To take the idea further, Zefty allows children to monitor their deposits and other withdrawals, and even print "ZeftyChecks" that they can hand their parents to exchange for cash. This way your child has the opportunity to manage a checkbook and see how checks work. Zefty even has savings tools that allow children to see how long they'll have to save to afford the items they want to purchase.

Zefty even has utilities that allow you to calculate based on your income and the age of your child, what their allowance should be based on. Because Zefty is a virtual bank and doesn't reflect any real money or transactions, it provides something of a sandbox that children and young adults can use without being thrust immediately into managing real money without the aid of their parents.

Zefty looks like a lot of fun and a great way for parents and children to collaborate and learn how to manage money together. At the same time, some parents might think it's more instructive to simply open their child's first bank account and help them manage their money using real dollars and cents, accounts with real interest, and a real debit card or checkbook. ZeftyCalc might be better for younger children or young adults who need that sandbox before jumping into the hassles of real world banks.